GM Eliminates Retiree Health Benefits, Dividend

[Helena]

Shell-shocked GM retirees react: 'This is a knife stab in the back' | Freep.com | Detroit Free Press


GM prepares for thousands of jobs cuts - Latest News - The Grand Rapids Press - MLive.com


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[ziggy29]

They're also getting an extra $3600 a year in their pension checks, AND they are Medicare-eligible. This is hardly a catastrophe. Now if you did this to retirees UNDER 65 who aren't yet Medicare-eligible, THAT would be a stabbing in the back.

[Marquette]

http://www.early-retirement.org/foru...hit-37202.html
http://www.early-retirement.org/foru...s-37152-2.html

[Zathras]

Better this than GM going under and not being able to support any retirees in any fashion.

[d]

ditto

[CompoundInterestFan]

Quote:

Originally Posted by Zathras Better this than GM going under and not being able to support any retirees in any fashion.

I'm sure that's comforting to all the retirees who now have to pay for their own health care (if they can get it at all). I know life's not fair and there're no guarantees, but still, to expect people who've been retired for years to just brush this off is a bit much.

[ziggy29]

Quote:

Originally Posted by CompoundInterestFan I'm sure that's comforting to all the retirees who now have to pay for their own health care (if they can get it at all). I know life's not fair and there're no guarantees, but still, to expect people who've been retired for years to just brush this off is a bit much.

I don't like that this happens to anyone, but it's hard for someone like me who has to rely almost exclusively on their own 401K and IRAs (no pensions or retiree health insurance) to feel all *that* bad for them.

An extra $3600 a year to buy Medicare supplements and pay other health care expenses on top of a nice pension is something that doesn't sound like a "stab in the back" to me. It may be slightly less sweet a deal as before, but to many of us, it's still something we can only dream of. And if this move made that pension a lot more secure than before, I can live with it...

[CitricAcid]

It is a tougher situation than they had to deal with for sure, but GM NEEDS to cut some of their expenses in order to remain solvent. They did not totally screw over those who were already retired by offering an extra $3,600 a year, but they still could not continue to support their health benefits. If making this move cuts enough spending that they can actually stay in business, who knows maybe they will actually be ABLE to pay pensions to the next generation of GM retirees.

Edit: By the way, when I clicked on the top link, there was a BIG, FAT car advertisement right in the middle of the text block... it was a Toyota ad.

[Marquette]

Quote:

Originally Posted by CompoundInterestFan I'm sure that's comforting to all the retirees who now have to pay for their own health care (if they can get it at all). I know life's not fair and there're no guarantees, but still, to expect people who've been retired for years to just brush this off is a bit much.

UAW could start a group policy to guarantee coverage. The costs won't be fun, but if getting insurance is a problem then it's at least a stop-gap until Medicare or possibly supplemental to Medicare after that.

[ziggy29]

Quote:

Originally Posted by Marquette UAW could start a group policy to guarantee coverage. The costs won't be fun, but if getting insurance is a problem then it's at least a stop-gap until Medicare or possibly supplemental to Medicare after that.

Maybe to make sure this doesn't happen to their retirees they could, but this round of takeaways impacts white collar retirees (i.e. non-union). They couldn't take this away from the UAW retirees without negotiations with the union.

[Bikerdude]

The problem as I see it is the weak and greedy management of the 70's and 80's at GM gave in to the union demands for heath care because they did not want a prolonged strike that would affect their bonus. And hey what do they care, they all retired in the 90's with big fat pensions and 401K's.

[rs0460a]

I retired from an automotive manufacturing company last year, after almost 30 years of "service".

It was (and still is) a UAW closed shop. Being salaried, I was (and to an extent still am) treated differently than the folks I managed.

The article does apply to non-UAW (salaried "management") retirees only, and yes, they are receiving assistance by an increase to a pension of $300 each to cover the increase in "medigap" coverage. Comparing this to my disabled son who has a medigap policy to supplement his Medicare part A/B, it isn't really a problem. His coverage costs $90/month from Blue Shield and there is no pre-existing test. Looking at that existing cost (and if he was married), these folks are looking at a cost of $200/month (and receiving $300 compensation). I know at some companies, retirees also get reimbursed for their part B contribution (what is deducted from Medicare) of about $100/month so if that's what is happening, it may be costing them about an extra $100/mo per couple.

You also have to consider that this is being done for future contract talks with the UAW. We were often in this position of cutting benefits (albit for a long time) before they were restored in some manner after new contracts were formed. The company can request the UAW to sit down earlier for contract talks - they don't have to wait years till the current one expires.

One other thing. You would think that working at a company that used the UAW (or any other union), the "management folks" would get a good deal and get the "perks" of the UAW. I'm not talking about the executives, just the plain "working stiffs" like me. That's a fallacy. There were times (especially in the early '80's) that non-union folks worked and got less pay than the production people they were supervising. I remember working overtime and not getting paid, while the UAW folks I was working with did. I did get time off, but hour for hour (unlike the UAW that was getting 1.5 to 2.0 pay).

Advantages? Non-union folks got a 401k many years earlier, and when it was finally part of the contract, the union folks did not get any company matching funds. Non-union folks received anywhere from 50% of 4% contribution to 100% of 8% contribution over the years (it was reduced over the years).

In retirement, I pay close to $500/mo for me/DW for full medical (I'm pre-Medicare), while retirees I worked with pay nothing. Current contract talks have been going on, and I'm sure that will change.

Am I bitter about the differences? Not really. I received a lump-sum when I retired (converted pension to a cash balance plan) and I was able to invest it for long term. When I had the pension (and the current retired union folks have the same situation), the monthly income is reduced when you get SS. The current UAW folks cannot get a lump sum. They must take the pension.

Over the years, I had the 401k, along with the match. The UAW folks drove nicer cars since they did not have the incentive to save (via 401k) for their retirement. Today, I direct my own retirement (funds/income) rather than counting on a company contract for my retirement income future.

Anyway, that's a look behind the scenes from somebody's who's "been there, done that".

- Ron

[Texas Proud]

As Ron said... the union is different.... they can not just up and change what they have agreed to with the union...

But almost every company puts in a clause for the other folks... they can change coverage at any time on THEIR terms.... that is why so many are now losing their medical coverage...

Me, I lost mine when my mega corp decided to stop offering it... but only to the people who were not yet 50... so, 49.5 did not make it..... and from what I can see... you actually paid the whole amount.... you just paid 'employee' rates and did not have the problems of pre-existing things...

I can see both sides very easily.... and have to agree with both sides.... the company has to be able to change for the 'health' of the company... they can not just agree to keep paying and paying and die... but the employees also 'agreed' to accept something less than what they might have been able to make.... with the promise of having this coverage in the future...


As we have all come to find out.... don't count on a promise from a company... if you can... get the money NOW and invest it yourself...


HMMM, I wonder if I can get my 'cash balance' account out of my old employer.... it is worth about $100K...

[youbet]

Quote:

Originally Posted by Bikerdude The problem as I see it is the weak and greedy management of the 70's and 80's at GM gave in to the union demands

Isn't that really just blaming the victims? If a prolonged strike would be a serious threat to your company's competitive position or its very existence, and you give in to demands you know will be troublesome over the long run........ are you really wrong?

I managed in a union environment for a number of years (Teamsters, Machinists, Steel Workers) and the thought for the day, everyday, was "the union can negotiate and win anything except the guarantee that the company will be able to pay for what they won or even stay in business!"

[youbet]

Quote:

Effective Jan. 1, GM will end health benefits for 97,400 salaried retirees 65 or older, their spouses and dependents. Retirees will receive an extra $300 a month in their pension checks that could be used to buy health care.

What are these retired GM management folks whining about? After they reach 65, they go on Medicare with GM paying $300/mo towards a nice supplement policy. Sounds like a pretty good deal to me. :confused: Before 65, assuming they've met age + service requirements, they get wonderful, fully paid, medical while ER'd. A sweet deal by any measure.

[Midpack]

I started working for MegaCorp in 1977, I am still with them (after 31 years). In 1994, they froze our pensions and make no additional contributions (new employees don't have a pension plan), and I will get about $200K lump sum at age 61. If I leave before I reach early retirement age, I get nothing whatsoever. In 1994, they also eliminated retiree healthcare for all active employees. I sure hope the media and others feel as sorry for me as they do for the GM retirees. And to the couple in the article, I'm sorry and I am sure it was disappointing, but welcome to the real world, where the rest of us (except Govt employees so far) live.

[W2R]

Quote:

Originally Posted by Midpack I started working for MegaCorp in 1977, I am still with them. In 1994, they froze our pensions and make no additional contributions (new employees don't have a pension plan), and I will get about $200K lump sum at age 61. If I leave before I reach early retirement age, I get nothing whatsoever. In 1994, they also eliminated retiree healthcare for all active employees. I sure hope the media and others feel as sorry for me as they do for the GM retirees...give me a break.

I don't know if the media feel sorry for you, but I sure do!! You must feel like a prisoner, knowing that if you leave you would be throwing $200,000 down the drain. It is no fun to feel trapped.

[Notmuchlonger]

Quote:

Originally Posted by Midpack I started working for MegaCorp in 1977, I am still with them (after 31 years). In 1994, they froze our pensions and make no additional contributions (new employees don't have a pension plan), and I will get about $200K lump sum at age 61. If I leave before I reach early retirement age, I get nothing whatsoever. In 1994, they also eliminated retiree healthcare for all active employees. I sure hope the media and others feel as sorry for me as they do for the GM retirees. And to the couple in the article, I'm sorry and I am sure it was disappointing, but welcome to the real world, where the rest of us (except Govt employees so far) live.

Not the same but my wife's hospital basically did away with pensions and went to a cash value system. Times certainly are changing.

[Midpack]

Quote:

Originally Posted by Want2retire I don't know if the media feel sorry for you, but I sure do!! You must feel like a prisoner, knowing that if you leave you would be throwing $200,000 down the drain. It is no fun to feel trapped.

I'm less than 2 years away from the lump sum, I'm not complaining and don't feel like a prisoner at all - I've made a very good living in the meantime for which I'm grateful. I never understand why there are articles about GM retirees when this has happened to millions of others for decades. Companies cannot survive the global economy with all these lifetime benefits, (some people) wishing won't make it so. GM still provides pensions and is giving retirees a $3,600/yr bump for MediGap - most of us have neither.

[FreeAtLast]

I think that the GM retirees got a fair deal with the extra $3600/year. GM just could not afford to make those payments. The problem is the pie has shrunk and people are expecting the same size slice as before.